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A product is sold by a single firm that carries the patent for the product. On the demand side, there are 20 high-income consumers who are willing to pay a maximum amount of $10 for the product, and 10 low-income consumers who are willing to pay a maximum of $4 for the product. Assume each consumer buys only one unit of the product and when indifferent between buying or not buying the good, it will buy. Suppose the firm cannot price discriminate & is therefore constrained to set a uniform market price. Assume the production is costless. Draw the market aggregate demand curve facing the monopoly & find the profit-maximizing price set by the firm.
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